An illustration of the usefulness of appropriate models for uncertainty.
Top: Possible petroleum production rates (oil cut) plotted vs. time, based on a stochastic model for geology.
Bottom: Restricted probability model (based on past observations)for petroleum production rates.
Using models for uncertainty makes it possible to estimate the errors that can result from imprecise measurements or other sources of variablity, at the same time allowing for efficient computation.
Figure credit: James Glimm.